By Samir Knox
Wyoming Tribune Eagle
Via- Wyoming News Exchange
CHEYENNE — Wyoming, and the United States as a whole, outperformed economic projections in 2023, one of the state’s top economists said Wednesday.
Despite a slight increase in the state’s unemployment rate, Wenlin Liu said that the economy could be headed for a “soft landing” in the new year.
Liu, chief economist with the Wyoming Department of Administration and Information’s Economic Analysis Division, said that the state’s economy seemed to fare better than the rest of the country.
“Wyoming’s economy continues to perform well, actually,” Liu told the Wyoming Tribune Eagle. “As far as the labor market … it’s really ‘tight,’ which means that the unemployment rate is low. It’s the lowest since summer 2008.”
According to a report published by the Wyoming Department of Workforce Services on Tuesday, unemployment in the state rose slightly in the past few months, from 2.9% in October to 3% in November. The report did note that it was much lower than in November of 2022, when unemployment was at 3.9%.
Wyoming’s unemployment rate currently sits well below the current national average of 3.7%, the report noted.
Liu continued by saying that Wyoming’s economy showed broad growth overall, with growth in a number of different areas, including tourism. He did note a slowing of growth in retail and financial activities. He said the slower-than-average growth in the sector of financial activities, which includes loans and property sales, could be due to rising interest rates applied by the Federal Reserve throughout 2023.
As the economy evolves, many experts, including those in extractive industries, are calling on the state of Wyoming to develop more diversified sources of revenue.
“The higher interest rate is trying to drive down inflation,” Liu said. “You have to pay higher (interest on) loans if you’re trying to buy a big item like an automobile, or even purchasing a house. Particularly, the housing market is slow, and business is facing a higher interest rate, and you’re trying not to expand your business much because, with high interest rates, you have to borrow more money.
“I think in 2024 that high interest rate will negatively impact the economy, will slow down economic performance,” Liu continued. “That’s why we expect 2024 will be slow. Unless we have another surprise, 2023 was somewhat of a surprise.”
Liu also pushed back on assertions made in previous years that the pandemic would lead to a major recession. He said that the stronger-than-expected growth in 2023 showed signs that a drastic recession was avoided.
He added that, going forward, the higher interest rate could slow down economic growth across the U.S. next year, but might allow for a “soft landing,” where issues like inflation and unemployment improve without drastic interruptions to the economy.
Overall, he said that employment, in many sectors, has rebounded from the COVID-19 pandemic, with growth surpassing pre-pandemic levels. One major exception is the mining industry, he said.
“Leisure, hospitality, and even retail, many other services, actually their employment is higher than pre-COVID levels,” he said. “So, overall, Wyoming’s total employment is already 2% higher than pre-COVID levels. … So that means our economy has been more diverse than pre-COVID.”
The main decrease, Liu pointed out, was in taxable sales, which he attributed to federal interest rates and the decline of mining in Wyoming.